Emergency Budget 2010: Tax payment and collectionWednesday, June 23rd, 2010
Recovering arrears of tax
Following a successful pilot exercise in 2009/10, HMRC has announced that it will use Debt Collection Agencies during 2010/11 to provide it with additional capacity to pursue and collect tax debts.
As part of HMRC’s debt strategy, all debts are risk assessed and in-house resources are focused first on the highest risk and highest value debts.
This additional capacity will accelerate the collection of lower value tax debts and generate an additional £140 million from debts that might otherwise be written off.
Financial security for PAYE/NICS
A consultation was announced for later in 2010 to look at the proposal to introduce powers for HMRC to require a financial security from employers who have a history of serious non-compliance in terms of non-payment or late payment of PAYE tax and NICs. There is already such a power in relation to VAT.
The proposal would affect those who are determined not to pay and not those who need time to pay and who make payment arrangements with HMRC. The consultation will also ask for comments on the sanction of a new criminal offence for failing to provide a financial security, which would be penalised by a criminal fine of up to £5000.
Managed Payment Plans
The Finance Act 2009 provides for HMRC to introduce Managed Payment Plans for the payment of income tax and corporation tax by self-assessment taxpayers. Following consultation during 2008, HMRC announced at the time of the 2009 Budget that these arrangements could not be introduced before April 2010 due to the need to make system enhancements. HMRC subsequently confirmed in January 2010 that the scheme would be in place for April 2010 but the June 2010 Emergency Budget announced that the decision had been taken to defer their introduction indefinitely.
The arrangements would have given taxpayers the facility to make regular monthly payments based on their liability. Payments would have straddled the due dates, with interest and surcharges suspended. However, Budget Payment Plans continue to be available to income tax payers.